In a significant move for the clean energy industry, Ohmium, a Silicon Valley company, announced on Wednesday that it has raised $250 million to increase the production of machines that can produce clean hydrogen and displace fossil fuels.
The funds, which were led by private equity group TPG’s Rise climate fund, will be used to scale up the plant in Chikkaballapur, India, and continue research at the Fremont, California headquarters to reduce production costs.
Hydrogen is a promising alternative to coal, oil, and gas, and some experts argue that burning hydrogen can substitute for burning fossil fuels in sectors such as cement and steel production without contributing to climate change. Ohmium’s role is to make electrolyzers, which are devices that take water and split it into hydrogen and oxygen.
CEO Arne Ballantine plans to use the $250 million to manufacture enough electrolyzers each year to supply 2 gigawatts’ worth of hydrogen. This amount is sufficient for a few steel or fertilizer plants or several refineries. Ohmium’s clients are entirely focused on producing hydrogen from renewable energy, such as wind and solar, which is in stark contrast to the less than 1% of hydrogen produced globally from renewable sources, according to the International Energy Agency (IEA).
Countries and industries are setting ambitious targets to reduce carbon dioxide emissions from heavy manufacturing using hydrogen. Tax credits and production incentives for clean, or green, hydrogen are being offered by the United States, European Union, Canada, and India.
The IEA reported in September 2021 that global hydrogen demand reached 94 million tons, and nearly 200 million tons will be needed by 2030 to reach net-zero emissions by 2050. To meet this demand for low-emissions hydrogen, it will require a significant ramp-up in electrolyzer manufacturing and zero-carbon electricity production.
Emily Kent, the U.S. Director for Zero-Carbon Fuels at the Clean Air Task Force, said it will take significant investment in electrolyzer manufacturing and zero-carbon electricity production to meet demand. While an electrolyzer can produce clean hydrogen, it requires massive amounts of electricity to operate. Most hydrogen is currently produced from natural gas, which emits greenhouse gases during production and transport.
Ohmium’s Lotus electrolyzer can be used as a partial substitute for natural gas by some U.S. power plants. The company is collaborating with Spanish energy company Cepsa and renewable energy developer Amp Energy India on green hydrogen projects. It also announced last week that it will send an electrolyzer to a liquified natural gas import terminal in Andalusia, Spain.
In conclusion, Ohmium’s latest fundraising efforts indicate the growing demand for clean hydrogen and its potential to replace fossil fuels in heavy manufacturing, power generation, and transportation. However, the significant ramp-up in electrolyzer manufacturing and zero-carbon electricity production required to meet demand represents a significant challenge.
